Article: Health insurance deductibles soar, leaving Americans with unaffordable bills

By NOAM N. LEVEY of Los Angeles Times


Soaring deductibles and medical bills are pushing millions of American families to the breaking point, fueling an affordability crisis that is pulling in middle-class households with health insurance as well as the poor and uninsured.

In the last 12 years, annual deductibles in job-based health plans have nearly quadrupled and now average more than $1,300.

Yet Americans' savings are not keeping pace, data show. And more than four in 10 workers enrolled in a high-deductible plan report they don't have enough savings to cover the deductible.

One in six Americans who get insurance through their jobs say they've had to make "difficult sacrifices" to pay for healthcare in the last year, including cutting back on food, moving in with friends or family, or taking extra jobs. And one in five say healthcare costs have eaten up all or most of their savings.

Those are among the key findings of a Los Angeles Times examination of job-based health insurance — the most common form of coverage for working-age Americans — which has undergone a rapid transformation, requiring patients to pay thousands of dollars out of their own pockets.

The conclusions are based in part on a nationwide poll The Times conducted in partnership with the nonprofit Kaiser Family Foundation, or KFF. Two Washington-based think tanks — the Health Care Cost Institute and the Employee Benefit Research Institute — provided supplemental analysis.

How the L.A. Times/Kaiser Family Foundation poll was conducted »

The Times also interviewed doctors, business leaders, researchers and dozens of Americans with high-deductible coverage and reviewed scores of studies and surveys of health insurance in the U.S.

At a time when healthcare is poised to be a central issue in the 2020 presidential election, these sources provide a comprehensive look at changes that have profoundly reshaped insurance.

The explosion in cost-sharing is endangering patients' health as millions, including those with serious illnesses, skip care, independent research and the Times/KFF poll show.

The shift in costs has also driven growing numbers of Americans with health coverage to charities and crowd-funding sites like GoFundMe in order to defray costs.

And it is feeding resentments and deepening inequalities, as healthier and wealthier Americans are able to save for unexpected medical bills while the less fortunate struggle to balance costly care with other necessities.

"It feels like the system isn't working," said Andrew Holko, a 45-year-old father of two who is facing $5,000 in outstanding medical bills because of diabetes medications, cortisone injections his wife needs for pelvic pain, a recent trip to the emergency room for his 9-year-old daughter and other services.

Holko's information technology job puts his household income above $80,000, close to themedian for a family of four. But with a mortgage, student loans and two growing children, Holko says he has little extra to cover a $4,000 annual deductible.

"We shop at discount grocery stores. My wife is couponing. We are putting every single bill we can on the credit card," Holko said, noting that even a family meal at McDonald's seems like a luxury. "We're drowning."

In the poll of working-age adults with job-based insurance, a quarter said they had put off vacations or major purchases in order to pay for healthcare. A quarter have curtailed spending on clothing and other basic household goods.

Half said costs had forced them or a close family member to delay a doctor's appointment, not fill a prescription or postpone some other medical care in the previous year. That is higher than some other national surveys, but a study published Thursday by American Cancer Society researchers found that in the last year, 56% of all U.S. adults had problems paying medical bills, delayed care or worried about affording care.

Hardest hit in the cost shift are lower-income workers and those with serious medical conditions such as diabetes, heart disease and cancer — who are more than twice as likely as healthier workers, according to the Times/KFF poll, to report problems paying medical bills and to say they've cut back on spending for food, clothing and other household items.

"There has been a quiet revolution in what health insurance means in this country," said Drew Altman, the longtime head of the Kaiser Family Foundation. "This happened under the radar while everyone was focused on the Affordable Care Act."

The 2010 healthcare law — often called Obamacare — provided landmark protections to Americans once shut out of health coverage. But as Democrats and Republicans fought over the law, Altman said, neither focused on the rapid run-up in costs for people covered through work.

Are you facing high medical costs because of a high-deductible health plan? Tell us your story »

"We forgot that most people get their insurance through an employer, and for them, the issue is medical bills that they increasingly cannot afford," Altman said.

As recently as 2006, nearly half of workers had a health plan with no deductible at all: Their insurance began immediately covering medical costs, often requiring them to pay, at most, a small percentage of their bills.

The average deductible for a single worker with a job-based insurance plan in 2006 was just $379, adjusted for inflation, according to an annual employer survey that KFF has conducted for more than two decades. By 2018, that figure had more than tripled to $1,350. Four in 10 U.S. workers have at least a $1,500 deductible — the threshold the poll used for high-deductible coverage for individuals.

Over the same time, insurance premiums also increased, rising at more than double the rate of inflation and outpacing wage gains.

"People are trying hard to do the right thing, but care is being priced out of their reach," said Dr. Barbara McAneny, president of the American Medical Assn., the nation's largest physicians' organization.

Like many doctors, nurses and hospital leaders, McAneny, an oncologist in New Mexico, can tick off stories of patients who have health insurance yet delayed critical care, fearing the bills.

"The original idea of deductibles and co-pays theoretically might have made sense — if patients have more responsibility for how they spend medical dollars, they would be more careful," McAneny said. "But it is just shifting costs to the patients, and people are forgoing care they need."

Feeling the strain are people like Sandy Westbrook, a 55-year-old nurse's assistant at an Ohio nursing home.

Westbrook, who earns less than $12 an hour, says she cut back on trips to the grocery store as she scrimped to pay off nearly $1,000 in medical bills after she broke her wrist and had to see a cardiologist for stress. "I get fed at work, thank God," she said.

Shanona Nichols, a 26-year-old office assistant in Michigan, moved back in with her mother to save money to pay medical bills from treatment for endometriosis.